The PS3 *could* have a 10 year life-cycle. Even if it is in a distant 3rd place, Sony could still stubbornly support it and keep it going even if it makes little or no profit for them. That COULD happen. It probably wouldn't make much sense from a logical standpoint, but then again neither does selling hardware at a massive loss (which Sony and MS have both been doing since the beginning).
Anyone remember the Neo-Geo? It was a weird 24-bit system which was supposed to be like an arcade you could have in your living room, and the games often cost like $400 PER CARTRIDGE. Not many people had it, but that system was around FOREVER during the 1990s. It was a niche system, and I guess the few people who did actually buy it were able to keep the system alive. It was an extremely niche system, but its longevity was unparalled in its day.
The PS3 COULD survive as a niche system. Heck, Nintendo could have given the GC a 10 year life span and probably could have made a profit on it for another 5 years. But it wouldn't have made much sense, because when your system is unpopular it makes more sense to come out with something new and fresh. When Sony says the PS3 will have a 10 year life, they might not be lying, but that still doesn't necessarily mean the PS3 will ever rise above 3rd place.